This article was published in the January 2018 journal of the Western San Bernardino County Bar Association and discusses the remedy of partition of real property by a court-appointed Partition Referee. The particular focus of this article deals with the mechanics of how a partition referee operates in civil actions.
INTRODUCTION TO PARTITION OF REAL PROPERTY
In California, joint owners to real property may file a lawsuit seeking to have their joint interest in the property partitioned. Code of Civil Procedure section 872.210. Partition actions follow an unusual procedure in that the court conducts an initial trial to determine whether the plaintiff has a right to partition the real property. Code of Civil Procedure section 872.210. If the court determines that there is a right to partition the property, the court enters an interlocutory judgment for partition. Code of Civil Procedure section 872.720. This interlocutory judgment for partition determines the interests of the parties in the property, orders the partition of the property, and determines the method of partition. In this interlocutory judgment for partition, the court is authorized to either divide the property between the joint owners or order its sale. Code of Civil Procedure section 872.810, et seq. Only after the partition is completed is a later final judgment entered by the court.
APPOINTMENT OF A PARTITION REFEREE
Once the court has determined that real property is to be partitioned, the court is authorized to appoint a Partition Referee for the purpose of handling the actual partition of the property. Code of Civil Procedure section 873.010. The court may appoint either one Partition Referee or, with the consent of the parties, three Partition Referees. Code of Civil Procedure section 873.020 and 873.030. (It is much more common to have a single Partition Referee.)
The Code of Civil Procedure does not set forth any qualification requirements for the Partition Referee, but the following categories of people are ineligible to be a Partition Referee:
A) A Clerk or Deputy Clerk of the Court
B) A former or present partner or employee of the Judge
C) A relative within the third degree of the Judge or the Judge’s spouse
D) An owner of record of the property that is being partitioned.
Code of Civil Procedure section 873.050.
The court’s order of appointment will set forth the duties and powers of the Referee.
DIVISION OF REAL PROPERTY BY A PARTITION REFEREE
If the court’s interlocutory judgment orders division of the real property (rather than sale of the property), the Partition Referee shall be appointed to carry out that division. Code of Civil Procedure section 873.210. To this end, the Partition Referee may be authorized to employ attorneys, surveyors, engineers, and the like. Code of Civil Procedure section 873.110 et seq.
The Partition Referee then issues a report proposing the division of the property into lots or parcels for the purpose of dividing the property amongst its owners. The report of the Referee may be confirmed, modified, or set aside by the appointing court. Code of Civil Procedure section 873.290. The division of real property proposed by the Referee shall become effective and vests title upon a final judgment of partition by the court. Code of Civil Procedure section 873.290.
SALE OF REAL PROPERTY BY A PARTITION REFEREE
If the court’s interlocutory judgment orders sale of the real property, the Partition Referee shall be appointed to carry out that sale. Code of Civil Procedure section 873.510. The sale by the Partition Referee can be made by either public auction or private sale, whichever is more beneficial to the parties. The court may (and often does) refer to the Partition Referee the job of determining the best manner and mode of sale of the real property. Code of Civil Procedure section 873.610. In the experience of the author of this article, the most common method of sale of real property is by private sale with the assistance of a real estate broker for advertising the property. Most often, the property is listed for sale in the commercial multi-listing service, and marketed in a manner consistent with other similar properties.
In order to consummate a sale, the Partition Referee is required to make a report of the sale to the court. This report includes details of the sale, such as the name of the purchaser, the sale price, and the terms of the sale. Code of Civil Procedure section 873.710. Sales by Partition Referees must be confirmed by the court before becoming final. Code of Civil Procedure section 873.720. Confirmation of the sale is made by motion to the court by the purchaser, Referee, or any party. Code of Civil Procedure section 873.720. At the confirmation hearing, the court may confirm the proposed sale, set aside the proposed sale, or allow higher bids for the property. Code of Civil Procedure section 873.740.
Upon confirmation of the sale, the Partition Referee is given authority to execute documents as required to consummate the sale. Code of Civil Procedure section 873.750. Following the consummation of the sale, the Partition Referee would normally report back to the Court with a final report and would be instructed by the court as to the disposition of the proceeds of sale. At that point, the Partition Referee would be discharged by the court.
PARTITION REFEREE’S FEES
Partition Referees are normally paid on an hourly basis for the work performed. Costs of sale (including the Partition Referee’s fees) are paid from the sale proceeds. Code of Civil Procedure section 873.820. As a matter of best practice, the court’s order appointing the Partition Referee should set forth the allowable hourly rate of pay for the Partition Referee so that there are no misunderstandings about the rate of pay.
About the Author
Matthew L. Taylor is an attorney based in Rancho Cucamonga, California. In addition to being an attorney, he has also acted as a Superior Court Receiver and Partition Referee in California.